How to Save for your First House
Buying your first home maybe exciting, but it also presents itself with a big responsibility when it comes to finances. Use these tips to help you save for a down payment on your first home.
Make a Budget
The first thing you need to do when it comes to saving for your home is to make a monthly budget, so you can ensure you are setting aside money to put into a savings account. Sit down and calculate your monthly expenditures, totaling up all of your essential costs, such as groceries, utilities, car insurance, current home renting expenses, etc.
Once you have done this, measure this against your monthly income and see what is reasonable for you to plan to save each month. While you should be aiming to save at least 20% of your income, the more you can set aside the better. Over time set a goal of how much of your income you would like to save and take steps to make this happen.
One of the best ways you can do this and make sure you allot enough to your savings each month is by having the amount be transferred automatically from your daily spending account to a specific savings account which does not allow you withdraw access on a regular bank card.
Cut some Costs
Once you know how much you want to save, it is time to start cutting costs and digging deep into how you can save your money. There are many areas where you may be spending excess funds that you do not need to.
For example, do you have monthly subscription services online, such as to a specific media streaming site or memberships via apps? You can also cut costs on things such as your power and water bills by being more diligent at turning out the lights, taking shorter showers, and using energy friendly appliances.
Save costs on fuel by walking when you can or carpooling to work and start taking your coffee and lunch from home instead of spending money on take out.
Keep it Reasonable
While saving for a house of course will take some time and require you to be able to set aside a large portion of money, be sure you are working towards a reasonable goal. Visit a financial planner to help you get an idea of what your savings should be based on your income and how long you can expect it to take to save for a down payment.
From there, work backwards as you determine what may be a reasonable first home purchasing price for you to work towards.
Remember that getting the down payment for your first home is the most challenging part of the process of buying your first home. Once you are close to having the funds, you can start searching for your perfect dream house.
To help you with finding dream houses, contact a professional Realtor in your area. They have sold more than their fair share of dream houses (and know a lot about saving!) and would be happy to help you with the purchase of your first dream home.